AKEL on government’s measures for the economy

Statement by AKEL C.C. Spokesperson Stefanos Stefanou on the government’s measures for the economy

AKEL C.C. Press Office, 29^th May 2020, Nicosia

We reiterate that for AKEL the main criterion for evaluating the measures announced by the government is whether and to what extent they can actually offer substantial support to self-employed working people and SME’s, who are facing a problem of survival because of the crisis generated by the pandemic.

While waiting to be fully briefed about the terms, preconditions and criteria of the schemes announced by the government, which will determine their effectiveness, we would like to make some comments on the announcements.

1. The experience of securing loans through the Entrepreneurship Fund is not so positive for very small and small businesses. And that is a problem, because these are the companies that primarily need support. The main problem remains that for SME’s that are heavily in debt due to loans they have made, borrowing is proposed as the main tool of their salvation, while many of these businesses which are in the gray zone of the criteria are in the end left out.
2. A one-time grant is a positive measure, which we have proposed and insisted that the government should adopt. We note, however, that the amount provided is insufficient. And it becomes even more inadequate after the number of beneficiaries has increased – correctly. The redistribution of the pie is even more unfair to very small businesses. We considered and still consider that the amount of direct support must be increased, even more so now that the government is claiming to have included the subsidy of rents in the grant. The needs are far greater and the problem with rents is acute. According to what the government has informed us about the state’s funding needs, we estimate that there is room for an increase.
3. The subsidy for new business loans and for home ownership is a measure that AKEL has proposed. However for it to operate positively, the criteria and preconditions that will be put in place must be in the direction of providing support to those businesses and households that really need it.
4. The acceleration of developmental projects by the state is imperative. After all, it is a principle that particularly in times of recession and crisis, the state must operate as the main axis for kick starting the economy. The problem we have to address is the government’s own erroneous record. During the Anastasiades-DISY administration, the implementation percentage rate of the developmental budget is low. The government has failed to address bureaucracy, which has led to long delays in promoting and implementing projects. If the same practice is continued by the government, then announcements will remain mere announcements without practical meaning, as with so many other government announcements.